PHARNEXT-SA

Pharnext Announces Strategic Partnership with Tasly, a Leading Chinese Pharmaceutical Group

Regulatory News:

Pharnext
SA (Paris:ALPHA) (FR00111911287 - ALPHA)
, a
biopharmaceutical company pioneering a new approach to the development
of innovative drugs based on the combination and repositioning of known
drugs, today announced the signature of a strategic agreement with Tasly
Pharmaceutical(Shanghai: 600535),
a group ranked amongst
China’s top 10 listed pharmaceutical companies. This partnership
includes three axes: a financial investment by Tasly in Pharnext; the
development of a new pipeline of synergistic combinations through a
shared platform; and the license of Pharnext’s lead product for the
Chinese market.

Pharnext has requested Euronext to resume trading on its stock exchange
effective as of Euronext Paris market opening on Wednesday May 10th
,
2017 at 9:00am CEST.

As a reminder, trading was suspended, as requested by the company and in
agreement with the AMF (French Market Authority), on Tuesday May 9th
,
at 2:30pm (CEST).

The above-mentioned major agreement is composed as follows:

An investment of €20 million by Tasly in Pharnext at a substantial
premium over the current stock price, including: €5 million in shares
at a price of €12.5 per share and €15 million in convertible bonds
with a conversion price of €13 per share.

The creation of a research and development Joint-Venture (JV), owned
30% by Pharnext, to develop new combinations of molecules. Programs
will be pursued in several indications, primarily in cardiovascular
and oncology therapeutic areas. Both companies will share their
expertise: Pharnext in the development of synergistic combinations of
drugs and Tasly in the use of traditional Chinese medicine wealth.
Once the combination of molecules proof of concept is established in
humans, commercialization rights will either be allocated to Pharnext
and Tasly or licensed to third parties.

A licensing agreement for the development and commercialization by the
JV of the drug candidate PXT3003 for Charcot-Marie-Tooth type 1A
disease on the Chinese market.

“This strategic partnership with Tasly is a major milestone: it
confirms the global interest in and the value of our innovative
technology platform, PLEOTHERAPY™. This partnership will provide access
to new markets and new indications for Pharnext technology and products,
while also integrating components of modernized traditional Chinese
medicine
,”
said Prof. Daniel Cohen, M.D., Ph.D.,
Co-Founder and CEO of Pharnext.
“We are very pleased and honored
to collaborate with Tasly, a visionary company with an impressive
history of revolutionizing the use of traditional Chinese medicine in a
modernized form
.”

“We are very pleased to enter into a meaningful collaboration with
Pharnext
,” said Mr. Yan Kaijing, Chairman of Tasly
Pharmaceuticals.
“The joint-venture we are creating has the
potential to generate a robust pipeline of new therapeutics. This
partnership allows us to secure a significant equity interest in
Pharnext, as well as the Chinese commercialization rights for their lead
asset for Charcot-Marie-Tooth Type 1A disease. We will rely on Tasly's
advantages of its existing biomedical R&D platform and access to the
Chinese hospital network; as well as Pharnext’s remarkable drug R&D
technological know-how to develop high-potential drug combinations,
addressing important unmet medical needs.Based on biological
disease network pharmacology, this partnership will exploit the immense
potential of modernized Chinese traditional medicine, characterizing in
a novel and precise way the mechanism of action of each combination we
will develop.
”

About Pharnext

Pharnext is an advanced, clinical-stage biopharmaceutical company
founded by renowned scientists and entrepreneurs including Professor
Daniel Cohen, a pioneer in modern genomics. Pharnext has two lead
products in clinical development. PXT3003 is currently in an
international Phase 3 trial for the treatment of Charcot-Marie-Tooth
disease type 1A and benefits from orphan drug status in Europe and the
United States. PXT864 has generated positive Phase 2 results in
Alzheimer’s disease. Pharnext is the pioneer of a new drug discovery
paradigm: PLEOTHERAPY™. The Company identifies and develops synergic
combinations of repositioned drugs at low dose. These PLEODRUG™ offer
several key advantages: efficacy, safety and intellectual property
including several product or composition of matter patents already
granted. The Company is supported by a world-class scientific team.

The company Pharnext is listed on Euronext Alternext Stock Exchange in
Paris (ISIN code: FR00111911287).

The company concept is "To share the joy of health with all” and the
company mission “To improve human life and quality of life”. Tasly is
committed to promoting the integration of Traditional Chinese Medicine
(TCM) with modern medical and pharmaceutical technologies. It is also
committed to building the first international brand of modernized TCM.
“To become the global innovation leader of modern TCM and the scientific
standard maker of modern TCM” is our target. To achieve this goal, Tasly
will strive to bring modernized TCM to international pharmaceutical
standards. To support its development strategy of “Comprehensive
Internationalization”, Tasly has set up a complete manufacturing chain
which respects international guidelines and exploits intelligent
manufacturing system. Based on its ”Two Wheel of Innovation and
Capitalization” strategy, Tasly has developed several core competitive
advantages, such as its R&D model, its multi-level product system, its
multi-dimensional patent protection system as well as its commercial and
marketing network.

The investment of €20 million by Tasly in Pharnext will be in two forms:
€5 million in shares, at a price of €12.5 per share, and €15 million in
convertible bonds (CB), paid at a rate of approximately 5%, and
automatically converted at a price of €13 per share once the price has
exceeded this value, on average, for 3 consecutive months. Tasly will
also have the opportunity to convert their CB at a price of €13 per
share at any time if the price is below this value. In the event of
non-conversion at the end of 3 years, the CB would be, at the option of
Pharnext, either repaid or converted at the market price with a discount
of 20%.

2)Joint-Venture (JV):

For clinical development and commercialization phases, Tasly and
Pharnext will benefit from licenses with respect to the following a
priori
guidelines:

Combinations of TCM and other molecules: European license for
Pharnext, Tasly benefiting from a license for the rest of the world.

Combinations of molecules without TCM: Chinese license for Tasly,
Pharnext benefiting from a license for the rest of the world.

These licenses will be granted to Pharnext and / or Tasly on payment to
the JV of a share of the platform research costs, and a term repayment
on sales or realized income.

Tasly will ensure funding of the JV at its inception, with a cash
contribution of 70 million RMB (€9.3 million) for new research and at
least as much for the development of PXT3003 in the Chinese market.

3)License:

The license to the JV of the drug candidate PXT3003 for
Charcot-Marie-Tooth Type 1A disease in the Chinese market will result in
an upfront payment by the JV to Pharnext of €2 million.

The closing of these 3 agreements is expected to take place around the
end of June 2017.